‘Unintended’ Collateral Damage? The Cambridge Economic Policy Group and the Joseph-Rothschild-Posner SSRC Enquiry, 1982

Two independent processes, first, the periodic CEPG funding application to the SSRC being dealt with by the Consortium set up by the SSRC Chairman Michael Posner to adjudge the competition for macroeconomic modelling grants and second, the Rothschild Enquiry launched by Keith Joseph in 1981, run in close parallel, and are co-terminus in reaching their final decisions. It is known that Posner had form and history in opposition to the Cambridge group with which he had (jointly with Richard Kahn) engaged in running policy, theoretical and doctrinal skirmishes, often ill-tempered, through the 1970s; that his politics had come to be well to the right of the some of the left-leaning leading members of the CEPG and related Cambridge Keynesians, and that he was a key member of Robin Matthews’ CLARE Group of like-minded, and like-acting, economists who were prominently of SDP loyalty and affiliation—with Matthews, at the time, along with Frank Hahn, leading an assault on the Cambridge heterodox economists within the Cambridge Faculty and the DAE, the home of CEPG. Belying all apocalyptic predictions based on the known Thatcher-Joseph hostility towards radical social science, the SSRC emerged from the Rothschild Review only lightly, not mortally, wounded; in sharp contrast, the outcome was negative and fatal outcome for the CEPG, with the tidings, both the happy and the sad, coming almost simultaneously from Posner in the SSRC. Strikingly, while the Godley-Cripps team—a vanguard of opposition to Thatcherite monetarism—was axed out of existence, a couple of other units of monetarist persuasion that were prominent for their support for the Thatcher policy regime, received financial support in the same application round from Posner’s SSRC Consortium. At a formal institutional level, the two processes were entirely distinct, and ran their separate courses. However, their curious inter-weaving and final confluence raises intriguing questions over the possibility that the imperatives released by the process underlying the Rothschild SSRC Enquiry might directly or indirectly have influenced some outcomes with regard to SSRC’s choices pertaining to the funding of macroeconomic modelling. The circumstantial evidence could credibly suggest such a hypothesis—but in the unsurprising absence of conventional forensic evidence, all that can be adduced is a corpse and a conjecture with no visible sign of a hand holding that smoking gun. This hypothesis is sketched out, partly because the case of the Rothschild Enquiry also highlights aspects of the deep ideological schism in this tumultuous period when neoliberalism, in its various manifestations, took hold in the UK, and globally, and systematically began to assert its hegemonic authority to discipline the inherently unruly, that is, left-oriented, social sciences. Cambridge post-Keynesian economics led by left-leaning economists were in the forefront of the firing line. This saga also reveals how the downfall of Cambridge heterodox traditions in economics was not just a local affair, a coup that started and ended within Sidgwick Site, but how the Cambridge episode was an expression of the wider ideological, political and material forces of global capitalism in the 1975–85 decade that was arguably the period of inflexion—where extreme free-market and libertarian agendas began to challenge and roll back the post-War social contract involving the welfare state and Keynesian macroeconomic management. In this charged ideological environment with the SSRC ostensibly under existential threat, did the CEPG come to be a bargaining counter quietly traded down the river out of the public eye? Was the closure of the CEPG a convenient case of collateral damage that conceivably served multiple interests? The truth lies dead and buried with the principals involved in the key transactions.